Arab Open University
B326: Advanced Financial Accounting
TMA - Spring 2020-2021 V2
Cut-Off Date: 8 May 2021
About TMA:
The TMA covers the advanced accounting concepts and practices in the businesses. It is marked
out of 100 and is worth 20% of the overall assessment component. This TMA requires you to apply the
course concepts. The TMA is intended to:
 Assess students’ understanding of key learning points within chapter 1, 3, 4 and 5.
 Increase the students’ knowledge about the reality of the advanced Accounting issues.
 Develop students’ communication skills, such as memo writing, essay writing, analysis and
presentation of material.
 Develop the students’ ability to understand and analyze different issues that corporations might
face in real world.
 Develop basic ICT skills such as using the internet.
The TMA requires you to:
1- Review various study chapters in addition to supplementary materials.
2- Conduct a deep information search using the internet and your E-Library. You are expected
to use E-library sources to support your answers. A minimum of 3 sources is required.
3- It’s imperative that you write your answer using your own words. Plagiarism will be penalized
depending on its severity and according to AOU plagiarism policy.
4- You should use a Microsoft Office Word and Times New Roman Font of 12 points.
5- You should use Harvard referencing style for in-text citation and list of references.
For Cut-off date: Check LMS
Criteria for Grade Distribution:
Content
Criteria
Marks
Part A
Part B
Part C
Part D
Referencing
& E-library
17.5
42.5
25
15
(5)
Structure and
Presentation
of ideas
Total
marks
(5)
100
The TMA Questions:
PART A
Access the Dell Technologies Inc. home web page and download: the annual report for the
fiscal year ended January 31, 2020 (Form 10-k). Note: this file is available at:
https://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_DELL_2019.pdf
Answer the following questions:
1) How does Dell Technologies Inc. account for Goodwill and Other Intangible Assets?
State the amounts of goodwill and other intangible assets as it appears in the financial
statement for the fiscal year ended January 31, 2020 and the fiscal year ended
January 31, 2019
(5 Marks)
2) Does Dell Technologies Inc. make any acquisitions during the fiscal year ended
January 31, 2020? , and how these acquisitions affect the goodwill?
(5 Marks)
3) From the annual report for the fiscal year ended January 31, 2020 :





Determine the total amount of non-controlling interest
State in which statement it is disclosed and in which section.
State the amount of non-controlling interest share in Dell Technologies Inc.’s
profit
State the amount of non-controlling interest share in Dell Technologies Inc.’s
dividends .Explain.
Discuss how Dell responded to the latest amendment issued by FASB to simplify
the test for goodwill Impairment
(Support your answer by writing the page number(s) in the annual report, from
which you get your answer)
(7.5 Marks)
PART B
1) Firms should conduct the impairment test for goodwill at least annually. Accounting
standards require more frequent impairment testing if some events occurs.
a) Identify the main events upon which goodwill undergoes a test for its impairment. (7 marks)
b) Provide one recent example from the real world for a company that made the goodwill
impairment test and reported goodwill impairment charges (Excluding Dell Technologies
Inc.). Your answer must be in a tabular format, and cover all the following points:
Example
Name of the company ( 1 mark)
The year (1 mark)
- The amount and details of goodwill
impairment charges as mentioned in the
annual report
- The URL (Internet address) of the annual
report
- The page number(s) in the annual report. (6
Marks)
The specific underlying business reasons
that required the company to record the
goodwill impairment charges as mentioned
in the annual report and any other
information from the media (7.5 Marks)
(Answers not provided in a tabular format will be disregarded and any examples given
dated before the year 2001 will not be considered).
(15.5 marks)
2) Explain in details ,the differences between the IFRS and GAAP (after FASB issued ASU
2017-04 to simplify the accounting for goodwill impairment) regarding the following:
- Assignment/allocation of goodwill. (i.e. The levels at which goodwill is assigned
/allocated)
- Impairment of goodwill and test(s) applied and its steps (i.e. Methods of determining
impairment of goodwill)
- How impairment loss is recognized and allocated.(i.e. impairment loss[charge] calculation and
allocation)
-
Amortization and impairment of intangible assets other than goodwill
Answer this question in a tabular format, like the following one:
IFRS
GAAP
Assignment/allocation of goodwill
Impairment of goodwill
How impairment loss is recognized
and allocated
Amortization and impairment of
intangible assets other than goodwill
(You must support your answer in this question with quality and up to date references.)
(20 Marks)
PART C
1) Explain in details the differences between Merger, Consolidation, and Acquisitions. Support
your answer with one recent example from the real world for each type. (Always give detailed
information that would support you answer.)
(15 Marks)
Explanation
Name of the
companies
Detailed information about
this business combination
Merger
Consolidation
Acquisition
(Answers not provided in a tabular format will be disregarded and any examples given
dated before the year 2001 will not be considered)
2) " If the accountant did not prepare the elimination entry of unrealized profit in inventories at
the end of any year, this will affect the consolidated net income in that year and in all subsequent
years". Discuss the accuracy of this statement and support your answer with a numerical example.
(5 Marks)
3) What is the difference between upstream sale of inventory and a downstream sale? Why is it
important to know the direction of sale when preparing the consolidated financial statements?
(5 Marks)
PART D
On January 1, 2018, Panorama Company acquired 80% of Scann Corporation for $6,400,000.At
the time of the acquisition, the book value of Scann's assets and liabilities was equal to the fair
value except for equipment that was undervalued $80,000 with a four-year remaining useful life
and inventories that were undervalued $20,000 and sold in 2018. Panorama separate net income
in 2018 and 2019 was $1,100,000 and $1,150,000, respectively. Scann separate net income in
2018 and 2019 was $300,000 and $360,000, respectively. Dividend payments by Scann in 2018
and 2019 were $60,000 and $60,000, respectively
Required: Using equity method,
1) Calculate Investment in Scann shown on Panorama's ledger at December 31, 2018 and 2019.
2) Calculate Investment in Scann shown on the consolidated statements at December 31, 2018
and 2019.
3) Calculate consolidated net income for 2018 and 2019.
4) Calculate Noncontrolling interest balance on Panorama's ledger at December 31, 2018 and
2019.
5) Calculate Noncontrolling interest balance on the consolidated statements at December 31, 2018
and 2019.
(Support your answer in all points with detailed calculations and explanation) (15 Marks)
[END OF QUESTIONS]
GOOD LUCK